6.4% and 5.7% yields! 2 top dividend shares I’d buy before the end of 2023

I think these dividend shares are top buys for long-term passive income. Here’s why I’ll be looking to buy them when I next have cash to invest.

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I think these UK dividend shares could help investors build a winning portfolio for the next decade.

The PRS REIT

Investor interest in buy-to-let has faded in recent years. Increasing tax liabilities, rising running costs, and ballooning red tape is causing an exodus of private landlords.

But this doesn’t mean residential property is a bad place to invest. Investors can still make good returns from the sector if they put their money in the right place.

I think The PRS REIT (LSE:PRSR) is a great way for people seeking passive income to play the property market.

Just like buy-to-let investors, the company receives a steady stream of rental income that allows it to pay bulky dividends. However, due to its increased scale — it has more than 5,000 properties on its books — it’s able to run its properties much more cost effectively than individual investors are.

What’s more, its huge homes portfolio helps reduce the risk of operational problems (like missed rent payments) at some of its properties on group earnings.

Grainger is another listed residential landlord whose stock I can buy today. But PRS has one characteristic that can make it a better investment for dividend chasers. As a real estate investment trust (or REIT), it must pay at least 90% of annual rental earnings out in the form of dividends.

Rents in the UK have ballooned in recent years. Industry experts expect tenant costs to continue to soar too as the market’s supply and demand imbalance grows. In fact estate agent Hamptons has predicted that rents that rents “will rise 25% over the next four years.”

I think PRS — which offers a giant 5.7% forward dividend yield — is a great stock to buy to capitalise on this opportunity. That’s even though build cost inflation could remain above normal levels for some time.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Greencoat UK Wind

Green energy producers like Greencoat UK Wind (LSE:UKW) have an opportunity to grow earnings (and dividends) strongly as the transition from fossil fuels heats up.

In the UK, the government aims to have onshore and offshore wind turbines generating 50GW of power by 2030. That’s up from around 14GW at present, meaning dozens more wind farms will have to be built to meet this target.

Companies like Greencoat UK Wind will play a vital role in this journey. And investors could make decent cash along the way. The firm is committed to growing its portfolio (which currently comprises 40+ assets) in Britain.

That’s not to say there won’t be hiccups along the way. Profits at renewable energy stocks can sink when the wind fails to blow. And this can cause turbulence in an operator’s share price. It can also have major implications for dividends.

But this doesn’t put me off as I invest for the long term. And I believe that the potential benefits of owning Greencoat shares outweigh any temporary troubles that power generation problems may cause. I think the company (whose dividend yield sits at a juicy 6.4% for this year) is a top buy following recent price weakness.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Greencoat Uk Wind Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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